(SACRAMENTO – Sept. 11, 2013) – With state leaders announcing an agreement for an unprecedented 25% increase in the minimum wage, the California Restaurant Association (CRA) calls on the Governor, Senators and Assemblymembers to consider the immense damage the move would cause to thousands of small businesses across the state.

AB 10 (Alejo) proposes to raise the minimum wage to $10 – or a $2 increase over the next 18 months. This would be the largest increase in the history of the California minimum wage.

“If state worker unions asked for a 25% pay increase they would be laughed out of the room,” CRA President + CEO Jot Condie said. “In fact, the Governor worked out a 4.5% increase over three years with the state’s largest union calling it ‘a fair proposal.’ The private sector is no different, and basic economics in our industry proves that this is unreasonable, irresponsible and represents a kind of tone-deafness about the real world for those small businesses who create jobs.”

The restaurant industry will be especially hard hit by such an increase – especially considering the vast majority of workers earning minimum wage are either teenagers or servers who earn tips on top of the minimum wage. According to the Bureau of Labor Statistics, 46% of restaurant workers are younger than age 20, and 80% of restaurant minimum-wage employees work part time.

The California economy continues to languish, with the largest number of unemployed adults in the nation. Businesses also are in the midst of preparing for immense cost increases that come with implementation of the Affordable Care Act, compounding the fact that 2014-2015 is the most inopportune time for the state to mandate additional massive labor cost increases.

About the California Restaurant Association: The California Restaurant Association is the definitive voice of the California restaurant and hospitality industry and has served to protect and promote its success since 1906. The restaurant industry is one of the largest private employers in California, representing more than 1.4 million jobs. Restaurants produce more than $58 billion in sales annually and generate more than $4.5 billion in sales tax for the state.

Paying a wage that ensures that the people working for it have to rely on state based aid because even after working they are in poverty just transfers the cost of business from private enterprise to the public.

When I started working in the late 1970’s you could actually live on minimum wage. In 1977 I was able to pay rent while attending college full time working at Full of Baloney (think Subway) at minimum wage. Why? Because it was a wage you could work at and live.

Personally I favor a $15/hr min wage. That would put a full time employee at $30K/yr. That would ensure that a worker at full time wages would be above the 2013 poverty guidelines as a single income earner for a family of four (average family size).

California has a poverty rate of 23.5 percent (2012). Imagine if these people were able to get a job that paid them above poverty level and were able to get off the dole. Not only would that save the sate money, but they would have more money to spend. Since our economy is based on consumer spending, that would be a “good thing”.

Increasing the minimum wage would add a small amount of cost to every product sold, but would be better for the economy and would eliminate many from the need to have society pay the costs associated to them living in poverty (even though they are working). Isn’t it time we stop socializing the cost of operation for businesses like wal-mart? (note that wal-mart is the largest employer that uses state aid programs to socialize their cost for employees rather than paying their employees a living wage).